Beiersdorf sales growth slows on sluggish Asia electronics demand
FRANKFURT, May 4 (Reuters) - Germany's Beiersdorf reported slowed quarterly sales growth on Wednesday weighed by its Tesa adhesives business but the maker of Nivea cream kept its full-year guidance citing prospects in consumer goods.
Organic sales growth of 2.4 percent for the three months to March 31 fell short of the 3.3 percent expected by analysts polled by Reuters.
Sales at Tesa, which makes adhesives used in cars, smartphones and tablet computers, fell by 5.9 percent while analysts had forecast 0.7 percent growth.
Facing sluggish demand from Asia's electronics sector, Beiersdorf Chief Executive Stefan Heidenreich cautioned on hopes for a quick recovery.
"We do not expect to see a short-time recovery in Asia's electronics business and there is not much we can do about it as this is completely market driven," Heidenreich told analysts on a conference call.
Beiersdorf's rivals are also struggling in the adhesives sector. Henkel, in October said it would cut 1,200 jobs amid a slowdown in its China and North America business.
CONSUMER DIVISION
Beiersdorf's operations include industrial adhesives as well as a consumer division with personal care brands such as Nivea, Labello and La Prairie.
The latter division fared better, with sales of 1.4 billion euros ($1.61 billion) and organic growth at 3.6 percent.
Beiersdorf confirmed its 2016 guidance for an organic sales growth of 3 to 4 percent citing confidence in sales of flagship brand Nivea.
However, it lowered its Tesa operating EBIT margin target to slightly below last year's performance.
"We see good opportunities for Beiersdorf to gain further market share with strong core brands and new products in 2016," said Thomas Maul, an analyst with DZ Bank.
Beiersdorf shares initially gained almost 3 percent on the company's upbeat remarks about its consumer unit but were down 0.15 percent at 1236 GMT.
($1 = 0.8712 euros) (Reporting by Tina Bellon; editing by Jason Neely)
